When you deposit a check to your account at your bank (“depositing bank”), it is sent to the bank on which it is written (“paying bank”). The paying bank may return the check unpaid for many reasons, such as insufficient funds, payment stopped, or signature irregularities. Until recently, the paper check was sent to the paying bank through one or multiple clearing banks. If the paying bank returned the check, it made its way back through the same banks. It could take several days before a bank received the returned check. You would not be aware of the check being returned until the bank debited the funds from your account. If you had already issued checks against these funds, then your account might be overdrawn.

In an effort to alleviate some of the potential for losses on returned checks, banks began placing “holds” on the depositor’s funds to allow time for the check to clear. Some banks began taking advantage of this ability to place holds. They held funds for extended periods of time, even when there was little risk involved.

To address this, federal regulators adopted Regulation CC to limit how long a hold could be placed on a check and the types of checks on which the hold could be placed. The length of the hold was originally based on locations of the paying bank and the depositing bank. If the paying bank was located outside of the clearing district of the depositing bank, a longer hold period could be used, because it physically took a longer period of time for the check to reach the paying bank and be returned.

As technology changed, more banks began clearing checks electronically. The Federal Reserve consolidated all of the paper check clearing to one location and it no longer made a difference where the paying and depositing bank were located.

The bank is limited on the time a hold can be placed on a deposited check. You, as an accountholder, should always consider the source of the check you deposit. Even after the funds have been released by your bank, the check may be returned. If that happens, you are still responsible for reimbursing the bank for the funds they made available to you.

In business since 1973, Wintek Corporation is the only locally owned and operated fiber optic service provider in Tippecanoe County. They deliver high-speed, dedicated fiber optic Internet and data services to businesses in Lafayette, West Lafayette, and surrounding areas. Owners Travis Bailey, Oliver Beers, and their 12 employees are proud of their customer-focused, local support that allows them to deliver cutting-edge services and a no gimmicks approach to sales.

Lafayette Community Bank has worked with Wintek for the last several years to finance many of their large fiber optic investments that bring high-speed connectivity to our area. We can thank them for providing free Internet service for the downtown public Wi-Fi network that is managed by the City of Lafayette, and for supporting many other non-profits and events with their discounted rates, creativity and innovation. We are proud of this company’s commitment to making our community a great place to live, work and play.

First things first. We talk about our “Gross Domestic Product” or GDP. That is the total dollar value of all the goods and services produced by any country. In the United States our 2013 GDP came in at $16.8 Trillion. Not bad at all, and the good news is its growing. Small businesses contribute about 46% of all non-farm GDP in the United States. So it sounds like small business is the place to be in the United States. The United States is the land of opportunity, but there a few things all prospective business owners should know. Nationally, Bloomberg reports that 8 out of 10 new businesses fail within the first 18-months. So, you have a 20% chance of being successful, the question is “What can I do to improve my chances for success?”

Know your prospective customer. What do they want, how do they want it, where do they want it. What motivates them to buy? Are they ready, willing and able to pay for what you are selling? The more prospective customers you talk to the better. You can interview friends and family, but you will not always get honest answers because they will not want to disappoint you. Talk to other small business owners, attorneys, and accountants—people you may not even know. Survey them. Collect honest opinions and feedback, you may find that you are trying to sell something or service that people may not be interested in or may already have, and therefore reluctant to change.

Understand your market. Is there market demand for my product or service? Is it consumable is the demand constant? Who is the competition, where is the competition? How big is the market, what is the opportunity? If you are trying to sell high-efficiency florescent light bulbs delivered to your door, consider what are the options, who else sells them online, or in store? How long does a high-efficiency light bulb last? Can I offer them at a comparable or even better price? Will the market pay what I am asking?

Product or Service Differentiation is Key. If your business is just like everybody else’s you are not going to attract attention or customers. More than likely you are going to have competition. If you do something just like everyone else, there is no incentive to try your brand, product or service. Give them a reason to try your business and when you have them give them a compelling reason to stay.

Know your value proposition. You should know this by heart and be able to tell customers what it is, easily and succinctly. If you have trouble telling customers what this is, take this as a sign. Think about branding campaigns of the past and how well they work. “There’s a lot riding on your tires.” This is a famous Michelin ad featuring a child wrapped by a tire. Michelin tires are really expensive when compared to other brands, but no one puts a price on the safety of their kids. Michelin pulls that emotional cord and it works. The new Subaru ads are the same way. The cars are well known for safety. In their ads today they show the cars being passed down to young drivers who have been protected by that very car. Or they have ads showing the car after an accident and the family is fine. Again they are making an emotional appeal. Subaru’s are not inexpensive cars and they are built really well. People don’t mind paying for quality and safety. The key is knowing what motivates people to buy the product or service you are offering.

Prepare a business plan. This is imperative. #1., #2., #3., and #4., all need to be included. You must also know exactly how much it’s going to cost to start the business and how you plan to fund it. In banking it’s called Sources and Uses. In other words, what are my sources of funding and what will the funds be used for? You also need to include a projection of revenue and expenses by month for the next 3-to 5-years. Include all the assumptions you used to construct the projection. Tie the revenue back to: how many will I sell? Identify the market and how much of it you plan to take. Illustrate the number potential customers and how you reached that number. Talk about pricing and how price was set. Tie the cost of goods sold back to vendors and suppliers, and use confirmed bids and prices. Back up all your expenses with data, i.e., how much rent, utilities, insurance, advertising, utilities, legal, wages, etc., all cost and go over your plan with trusted advisors. SCORE is a great place to start and they are a part of our local Chamber of Commerce. You can also talk to bankers, accountants, attorneys or other business owners you may know.

Capital: This came up in #5. It’s very difficult to start a business without capital. It’s equally hard to sustain a business with inadequate capital. In most cases, the new business owner must look to their own savings, family or friends for the “seed capital” to start their business. Bankers have a tendency to look for businesses that have a demonstrated track record. Simply put, bankers look for the existence and sustainability of revenue stream that sufficiently covers all expenses plus any required debt payments. The best time to develop a capital plan is before serving notice to your current employer and launching your new business.

There is much to think about and consider! Entrepreneurs with a vision and a plan started all businesses at some point and time—we see them all over our community. Recently we launched a new business incubator known as “Match Box” to help promote the exchange of ideas and approaches so that a wider audience might benefit. In summary, new small businesses are a key driver of our local and national economy. We welcome small business owners at Lafayette Community Bank, we strongly believe in investing right here in Tippecanoe County. Come and see us today or give us a call!

A debit card is connected to your checking account and allows you to pay for goods and services through the Visa network in a way that will come directly out of your checking account. When using your debit card, you can use it in two ways: 1) As a PIN (personal identification number) based transaction, where you swipe your card and then enter your PIN number at the time of purchase, or 2) As a credit based transaction, where instead of using your PIN, you swipe your card and then sign your name at the time of purchase. Regardless of which method you use, your purchase will be deducted directly from your checking account. There is no charge for obtaining a debit card and you may use it as many times as you wish without any monthly service charges.

CREDIT CARDS

A credit card is a payment card issued to users (card holders) who then pay for goods and services based on the card holder’s promise to pay for them at a later time. The card issuer (Bank) creates a revolving account and grants a pre-determined line of credit to the card holder from which they can borrow money for payment of goods or services and/or as a cash advance to the card holder. Credit cards allow the consumers to maintain a continuing balance of debt, subject to monthly interest charges along with a required monthly minimum payment from the card holder. Note that the card holder can choose to pay off the balance of the outstanding charges on a monthly basis and avoid paying any interest charges. Monthly payments must be made by the due date to avoid late charges. Be aware that some credit cards have annual fees associated with them, while most do not.

GIFT CARDS

A gift card in most cases resembles a credit card as there is a display or specific theme on a plastic card about the size of a credit card. The card is identified by a specific number or code, not usually with an individual name, and thus could be used by anyone. They are backed by an online electronic system for authorization. In most cases the cards will have a magnetic strip, which is read by an electronic credit card machine. Many cards have no value until they are sold, at which time the cashier enters the amount which the customer wishes to put on the card. Gift cards are divided into “open loop” cards and “closed loop” cards. The former are issued by banks or credit card companies and can be redeemed by different establishments, the latter by a specific store or restaurant and can only be redeemed by the issuing provider. Be aware that some gift card issuers impose expiration dates and/or fees, so it pays to shop around.

Lafayette Community Bank is completely invested in our community. Once a month we will share a story about an organization, business, club or school via Community Corner. Community Corner is our way of supporting our friends and neighbors; perhaps uncovering a hidden gem you haven’t heard about. Our first Community Corner story features Walt’s Other Pub:

Locally owned and operated by Walt and Kristy Foster, Walt’s Other Pub has grown from the couple’s vision and their twenty plus years of experience working in and operating such local favorites as The Pub and The Other Pub. Walt and Kristy purchased The Other Pub in 2007 and in 2012 they moved across South 9th Street into a beautiful new building and changed the name to Walt’s Other Pub.

Walt’s Other Pub’s friendly and open atmosphere offers fun for all ages. With 2 levels of seating, the restaurant is a relaxing and cozy place to eat. They also have great outdoor seating including a balcony. Come to Walt’s Other Pub for the big game, for a night out with friends or family, or even have an event in our separated banquet room.

Walt’s Other Pub:

Waltsotherpub.com
3001 S. 9th Street
Lafayette, IN
(765) 474-9527

If you have a suggestion of a business or organization in our community to feature in our Community Corner email us your suggestions or comment below!

Your wallet and purse are a big target for thieves. Empty your wallet of all extra credit cards, social security cards, birth certificate, passport, identification cards you don’t need on a weekly basis, as well as receipts and credit card statements.

Be careful using an ATM’s or prepaid phone card. “Shoulder surfers” can get your “pin” and get access to your accounts.

Protect your mail. Identity thieves are always on the lookout for incoming mail just sitting in your mailbox. Have your checks delivered to the bank or pick your checks up at the bank. Do not put checks in the mail from your home mailbox. Drop them off at a U.S. Mailbox or the U.S. Post Office. Get your mail as soon as possible. If you are going away, arrange for a trusted friend to pick up your mail.

Always log out of websites you shop or bank on.

Erase financial programs and stored information from your computer’s hard drive and your old cell phone before you dispose of them.

Create strong passwords that use a combination of letters, numbers and symbols, and avoid using the same password and username for multiple accounts.

Cancel all credit cards that you do not use or have not used in 6 months. Thieves use these very easily—open credit is a prime target.

Do not put your telephone numbers on your checks.

In conjunction with a credit card sale, do not put your address, telephone number, or driver’s license number on the statement.

Make a list of all your credit card account numbers and bank account numbers with customer service phone numbers and keep it a safe place. (Do not keep it on the hard drive of your computer if you are connected to the Internet.)

While Identity theft is a growing and serious problem, you will never completely eliminate the risk. These are a few suggestions that will help you significantly reduce your exposure and risk to Identity theft.

Lafayette Community Bank owes its very existence to the Greater Lafayette community. Founded in 2000, local business owners and community leaders came together to start a new bank. Our primary focus then, and now, is to provide banking services to the community we call home.

There is a quote by John F. Kennedy that says, “To whom much is given, much is expected.” The Greater Lafayette community has entrusted us to safeguard their deposits, and they trust that we will reinvest those deposits for the betterment of our community. That requires a high level of trust and confidence. We return that trust and confidence every day in the form of loans and financial services that benefit our customers and our community at large.

But that’s not quite enough. We believe that we must make tangible contributions to the community we serve. We have a philosophy that promotes and encourages volunteerism. We have a total of 40 employees at our bank, and in any given year we have over half of our employees involved and participating in organizations throughout our community. We also provide monetary support. In the last 13-years we have contributed over $250,000 to local organizations. From United Way, to March of Dimes, to Almost Home Humane Society, local schools, youth sports, and the Honor Flight just to name a few. Every year we support nearly 70 different organizations or charities in our community.

We do this because it’s the right thing to do. We are proud members of this community, and we plan to be for many years to come. We have been given the opportunity by all of you to become your community bank, and serving and supporting our community is our way of saying thank you. We are honored to provide banking services in what we believe to be the greatest place to live in Indiana—the Greater Lafayette community.